National Institute of Environment and Climate Change of Mexico (INECC) Publishes Study on Climate Technology Value Chains in the Transport Sector

The National Institute of Environment and Climate Change of Mexico (INECC), recently published the ‘Study of climate technology value chains in the transport sector’ delivered by HINICIO. The aim of the study was to analyse the costs and value added across the value chains of clean vehicle production in Mexico, in order to support government decision making to support emission reductions in the mobility sector and to strengthen innovation and development of automotive technologies in Mexico.

The study compared clean automotive powertrains such as electric, hybrid, natural gas, with conventional technologies such as gasoline, diesel for light and heavy duty vehicles (cars, buses and trucks). Results of the study show that the acquisition of hybrid and electric cars is still relatively more expensive than for conventional cars, as there are not enough incentives in Mexico. However, hybrid and electric cars become more economic than gasoline cars for certain uses such as taxis, due to significant fuel savings. On-going reduction in the cost of batteries represents the greatest opportunity in reduction of prices for electric and hybrid cars.

Furthermore, the study shows that the price of acquisition for electric buses is still relatively high compared to conventional technologies, limiting their introduction to the Mexican market. However, looking at the Total Cost of Ownership (which takes into account investment and operating costs during the lifetime of the vehicle), electric and natural gas buses represent important savings over conventional technologies. Natural gas technology is presented as the most viable short-term option for the adoption of climate-friendly bus technologies in Mexico due to their lower investment costs compared to electric buses. Support and incentive programs and development of the equipment are important factors for achieving greater penetration of clean technologies.

In conclusion, if barriers such as high investment costs, technical limitations, availability of low sulfur diesel and infrastructure networks can be overcome, cleaner technologies such as electric, hydrid, natural gas, and diesel with standards Euro 6/EPA 2010 show real and concrete opportunities to decarbonize transport in Mexico, while maintaining economic value added in the country. Find out more.